Correlation Between AP Memory and Onyx Healthcare

Can any of the company-specific risk be diversified away by investing in both AP Memory and Onyx Healthcare at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining AP Memory and Onyx Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AP Memory Technology and Onyx Healthcare, you can compare the effects of market volatilities on AP Memory and Onyx Healthcare and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in AP Memory with a short position of Onyx Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Memory and Onyx Healthcare.

Diversification Opportunities for AP Memory and Onyx Healthcare

-0.21

Correlation Coefficient

AP Memory  Onyx Healthcare

Very good diversification

The 3 months correlation between 6531 and Onyx is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding AP Memory Technology and Onyx Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onyx Healthcare and AP Memory is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on AP Memory Technology are associated (or correlated) with Onyx Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onyx Healthcare has no effect on the direction of AP Memory i.e., AP Memory and Onyx Healthcare go up and down completely randomly.

Pair Corralation between AP Memory and Onyx Healthcare

Assuming the 90 days trading horizon AP Memory Technology is expected to under-perform the Onyx Healthcare. In addition to that, AP Memory is 1.17 times more volatile than Onyx Healthcare. It trades about -0.04 of its total potential returns per unit of risk. Onyx Healthcare is currently generating about -0.03 per unit of volatility. If you would invest  16,700  in Onyx Healthcare on October 23, 2024 and sell it today you would lose (750.00) from holding Onyx Healthcare or give up 4.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AP Memory Technology  vs.  Onyx Healthcare

AP Memory Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AP Memory Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, AP Memory is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Onyx Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Onyx Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Onyx Healthcare is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with AP Memory and Onyx Healthcare

The main advantage of trading using opposite AP Memory and Onyx Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Memory position performs unexpectedly, Onyx Healthcare can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Onyx Healthcare will offset losses from the drop in Onyx Healthcare's long position.

The idea behind AP Memory Technology and Onyx Healthcare pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.